5 Dec: ECB, RBA Meetings due this week, while UK High Court Appeal over Brexit starts today #fx #forex

By | December 5, 2016

The US dollar finished the week on a relatively soft note even though Friday saw the unemployment rate fall to a more than nine-year low of 4.6%, with the Non-Farm Payroll increasing by 178K in November, making it almost certain that the Fed will raise interest rates later this month. On the other side of the coin, the participation rate fell to 62.7 from 62.8, the prior month’s figure was revised lower from 161k to 142k and the average hourly earnings missed, coming in at -0.1%, well below expectations of +0.3%, but unlikely to cause any change of view at the Fed, who seem likely to hike rates at the upcoming FOMC. The soft hourly earnings figures do raise doubts about the overall strength of the economy and therefore the ability as to whether the Fed will be able to sustain more than one rate hike in the coming months, which may add to the generally soft tone to the dollar in the days ahead. Elsewhere, stocks ended on a steady note, while WTI added to its gains and finished the week above the 51.30 reverse head/shoulder neckline, signalling further gains ahead.

In political events taking place over the weekend, the Austrian presidential election has seen the far-right Presidential candidate lose heavily to the left wing independent, which came as a blow to populists who had hoped that a wave of anti-establishment shifts would follow Brexit and Trump results, and comes ahead of the spate of EU elections due in 2017. The Italian referendum result is still undecided, as vote counting is still under way at the time of writing. The press is reporting that the voter turnout was higher in the North, which was more likely to vote “Yes”, than the South, likely to vote “No”, so this could be seen as a good sign for the PM, Renzi.

The coming week will be another active one, with the focus being on the central bank interest rate decisions from the RBA and the ECB although no change in policy is really expected from either of them. Other important pieces of economic data will be the UK High Court Appeal Hearing over Brexit (Monday), EU GDP (Tuesday) the Japanese Q3 GDP (Thur) and the US Consumer Confidence figure on Friday. Today kicks off with the global Services and Composite PMIs and the EU Sentix Investor Confidence Survey, while before that Australia gets the monthly TD Inflation, ANZ Job Ads.

CURRENCIES
EURUSD: 1.0661
Res  1.0690  1.0710  1.0745
Sup  1.0625  1.0600  1.0550
USDJPY: 113.47
Res  113.80  114.20  114.85
Sup  113.30  112.90  112.50
GBPUSD: 1.2729
Res  1.2770  1.2800  1.2850
Sup  1.2275  1.2085  1.1940
USDCHF: 1.0102
Res  1.0210  1.0275  1.0370
Sup  1.0065  1.0000  0.9930
AUDUSD: 0.7458
Res  9111.4740  9507.2270  9875.3690
Sup  8697.3140  8329.1720  7915.0120
NZDUSD: 0.7140
Res  0.7160  0.7185  0.7200
Sup  0.7030  0.6975  0.6955
INDICES / COMMODITIES
S+P: 2191
Res  2196  2200  2214
Sup  2184  2178  2170
DJI: 19149
Res  19190  19215  19250
Sup  19135  19100  19040
SPI200.fs: 5464
Res  5480  5500  5525
Sup  5450  5435  5415
GOLD: 1177
Res  1194  1200  1210
Sup  1160  1150  1140
XAGUSD: 16.71
Res  16.95  17.20  17.45
Sup  16.30  16.15  16.00
OIL (WTI): 51.62
Res  51.80  52.55  53.40
Sup  50.15  49.00  48.00

 

Indices/commodities
S&P Futures 2191

The S+P did little of interest following Friday’s jobs data albeit that the index was slightly heavy, but finished in the middle of the 2184/96 range.

With the dailies still unwinding their overbought condition we could yet head a bit lower and below Friday’s base would allow 2178 and 2170 to be tested, a break of which could see 2140/50 although unlikely. On the topside, back above 2200, resistance will arrive at 2213, above which we might expect the slow grind higher to continue, towards 2220. With the weeklies apparently trying to turn higher, the slow grind to the topside again seem to be the most likely outcome although the dailies do suggest slightly better levels to buy into.

24 Hour: Neutral

Medium term: Neutral

sp

                                       Resistance Support
2225 Minor 2184 Friday low
2220 Minor 2178 21 Nov low
2215 Minor 2169 (23.6% of 2028/2213)
2213 30 Nov high  / All time high 2160 Minor
2196 Friday high 2150 Minor
DJI Futures 19149

As with the S+P, a neutral stance is required but given the look of the daily DJI chart, buying near term dips still seems to be the longer-term plan, as the slow creep higher appears set to continue.

24 Hour: Neutral

Medium term: Neutral

dji

Resistance Support
19500 Minor 19132 Friday Low
19400 Minor 19099 30 Nov low
19350 Minor 19041 28 Nov low
19300 Minor 18973 23 Nov low
19214 30 Nov high/All time high 18911 22 Nov low
SPI200.fs 5464

The ASX had a tough session on Friday, led lower by Bellamy’s, after the infant formula manufacturer after it indicated that it expects sales momentum to be hit by import regulations in China. The nervousness seeped through the market, causing the SPI to fall to a low of 5437 before a bounce later in the US session to finish at 5465.

The momentum indicators generally appear to suggest further choppy, sideways trade in the sessions ahead, where 5480 and 5500 would provide topside resistance. Above 5500, (unlikely today), would meet the 5517, 28 Nov high and the 25 Nov high of 5527. Beyond there though, further gains will find little to stop the SPI heading on to the August high of 5568, which should be strong resistance but beyond which could see a run to 5600 and above, and then we could then see a run towards the August 2015 high at 5671.

On the downside, back below the Friday low of 5437 will see buyers at 5425, a break of which could see a run back to 5400, although again, this looks unlikely today.

24 Hour: Neutral

Medium term: Neutral

spi

Resistance Support
5568 1 August high 5450 Minor
5527 25 Nov high 5437 Friday Low
5517 28 Nov high 5426 30 Nov low
5498 Friday high 5405 23 Nov low/ (23.6% of 5029/5527)
5480 200 HMA 5335 (38.2% of 5029/5527)
GOLD 1177

Gold had a rangebound session on Friday (1166/78), leaving the outlook unchanged.

In the medium term as we approach the December FOMC Meeting and the growing chance of a rate hike and stronger dollar, Gold is likely to stay under pressure. The 1170 support currently holds but if it gives way, then we could see a quick return to last week’s 1161 low, below which we would find bids at 1155, but under here there is little to hold the price up until 1120. On the topside as before, resistance will be seen at 1180/85 and then again in the 1195/1200 area although this looks unlikely to be seen for a while. Given that the weeklies point lower I still prefer to trade strategically from the short side. In the meantime, the short-term momentum indicators are flat, suggesting another rangebound session.

24 Hour: Neutral

Medium term: Mildly bearish

gold

Resistance Support
1210 Minor 1161 2 Dec low
1201 (23.6% of 1337/1170) 1157 4 Feb low
1195/97 28 Nov high 1140 Minor
1190 200 HMA 1130 Minor
1178/82 Friday high/100 HMA 1122 (76.4% of 1046/1375)
XAGUSD 16.71

As with Gold, Silver had a rangebound session (16.31/80), leaving the outlook unchanged.

Once again, the short-term momentum indicators are flat. As we said before, it could be that Silver is building a minor reverse head/shoulder formation, with a neckline at 16.85, which if that were the case, would have an objective at around 17.50. If seen it would suggest a medium term sell opportunity. In the meantime, below Friday’s 16.31 and the minor double bottom at 16.16 could see a test of 16.00, beneath which would allow a run towards 15.80 and potentially to 15.40.  I still prefer to trade from the short side although leave room for a short-term squeeze towards 17.50 before jumping in too heavily.

24 Hour: Neutral

Medium term: Prefer to sell rallies

silver

Resistance Support
17.50 Head/shoulders objective 16.31 Friday Low
17.23 (38.2% of 18.98/16. 17)/16 Nov high 16.16 25 Nov Low/23 Nov low
17.00 Minor 16.00 Minor
16.85 (23.6% of 18.98/16. 17)/28 Nov high 15.81 1 June low
16.79 Friday high 15.50 Minor
OIL (WTI) 51.62

WTI continued to head higher on the back of last week’s OPEC result, finishing Friday just below the 51.70 session high.

Technically, WTI has now made a weekly close at just above the head shoulder neckline, potentially allowing for some strong gains in the days ahead. As we said previously, the head shoulder formation seen in the weekly charts would have an objective of 82.00 and given the building positive momentum seen in the dailies, further upside action looks very possible. Nearer home, if we do head higher, 52.20 would see sellers, beyond which the next level to watch would be at 53.50. On the downside, support will be seen at 50.00 and again at 49.50. Buying dips now seems to be the plan, with a SL placed under 49.50.

24 Hour: Prefer to buy dips

Medium term: Bullish

wti

Resistance Support
53.52 9 July 2015 high 51.00 Minor
53.00 Minor 50.16 Friday Low
52.19 19 Oct high 49.50 (23.6% of 42.19/51.77)
51.77 2 Dec high 49.00 Minor
51.30 Head Shoulder Neckline 48.10 (38.2% of 42.19/51.77)

EURUSD: 1.0661

The Euro traded a tight 65-point range on Friday, unable to decipher any directional bias from the NFP, while waiting on the outcome of the Italian referendum/Austrian election. As noted earlier, the Austrian election has been won by the leftist candidate, avoiding a lurch to the far-right, while the Italian referendum vote count is still underway, but it looks as though the “Yes” vote will win, which will be a relief for the Italian Prime Minister whop called it, and also to the bureaucrats in Brussels. The Euro is opening a little higher in early inter-bank trading as a result.

Technically, the short-term charts remain neutral, while the dailies still appear to be trying to find a base as the daily momentum indicators struggle higher although the price action is making relatively little headway to the topside and eventually I suspect we will see a resurgence of the stronger dollar, keeping the Euro under pressure. With regards to the charts, on the topside, resistance will be seen at 1.0685/90, above which we could see a sterner test of 1.0700, a break of which would allow a run towards 1.0745 and possibly to 1.0800 although I don’t really see it.

The downside will again see bids at 1.0600 and then at 1.0551, 30th Nov low, a break of which could head to the strong support at 1.0517/20, below which would eventually open the way to the March 2013 low at 1.0461. Under this, there is very little to hold the Euro up ahead of 1.0300 and then again, not a lot until we reach parity.

Aside from dissecting the weekend’s political outcome in Italy/Austria, the main event this week will be the ECB Interest Rate Decision. No change is expected to policy although markets will be on heightened alert about “tapering” of the QE programme. Expectations are for the ECB to extend its €80bn monthly buying program from March to September, but the risk is that they lower the pace of bond purchases. The economic case for continuing the current program is very strong given that core inflation remains below 1%.

24 Hour: Prefer to sell rallies

Medium term: Prefer to sell rallies

Resistance Support
1.0760 16 Nov high 1.0624 Friday Low
1.0745 17 Nov high 1.0600 200 HMA
1.0725 Minor 1.0551 29 Nov low
1.0703/10 (23.6% of 1.1282/1.0517) /17 Nov high 1.0537 25 Nov Low
1.0685/89 28 Nov high/Friday high 1.0517/21 24 Nov low/3 Dec 2015 low

Economic data highlights will include:

M: EU/US Services/Composite PMIs, EU Sentix Investor Confidence Survey

T: German Factory Orders, EU Q3 GDP, US Trade Balance, Factory Orders, API Weekly Crude Oil Stock Inventory

W: German Industrial Production, EIA Crude Oil Stocks Weekly Change, Consumer Credit

T: ECB Interest Rate Decision, US Jobless Claims

F: German Trade Balance, Rts/Michigan Consumer Sentiment Index, Wholesale Inventories, Baker Hughes Oil Rig Count

Meta Trader
EURUSD: 4 Hour

euro


USDJPY: 113.47

US$Jpy continued to correct the overbought condition seen in the daily charts following Friday’s NFP and, unable to take advantage of the solid figures, the dollar fell to a low of 113.32 before finishing at 113.50.

 The daily charts remain extremely overbought, so further corrections seem inevitable although buying dips remains the medium-term theme, but take care as there are only minor support levels below 113.30 until 112.00.

On the topside sellers, will be seen at 114.00 and again at 114.20, Friday’s high. Beyond there, albeit probably not today, the 100 DMA at 114.60 will be the first hurdle ahead of the 114.82 trend high. Above that, there is little to stop the dollar heading on to 115.50/60, beyond which we could see a run towards 116.00 and even to 117.80 (76.4% of 121.05/98.94). For the time being, trading cautiously from the short side seems to be the plan, but further out, heading into 2017 I suspect that we have further dollar strength ahead of us.

24 Hour: Neutral

Medium term: Neutral – Prefer to buy dips

Resistance Support
115.50 (61.8% of 125.85/98.94)/Weekly cloud top 113.32 Friday Low
114.82 2 Dec high 113.05 100 HMA
114.60 100 DMA 112.90 200 HMA
114.20 Friday high 112.50 Minor
113.80 Minor 112.15 Minor

Economic data highlights will include:

M: Consumer Confidence Index

T:

W: Leading Economic Index, Coincident Index

T: Q3 GDP, Foreign Bond/Stocks Investment, Current Account, Trade Balance, Eco Watchers Survey

F:

Meta Trader
USDJPY: 4 Hour

yen


GBPUSD: 1.2729

Cable continued its strong performance on Friday, finishing above 1.2700 following some late buying on the back of the hopes of a “soft” Brexit and on the back of EurGbp which saw some movement out of the Euro ahead of the Italian referendum/Austrian Election.

Looking ahead, Monday will see the start of the UK Supreme Court Hearing over the Government-Parliament Brexit Appeal, which at some stage is likely to cause some heightened volatility for Cable. Don’t get too excited though as the Court is not expected to hand down its decision until January.

The charts are picking up positive momentum and above Friday’s high/close could see a run towards the 100 DMA at 1.2785, beyond which there is little to stop cable heading to 1.2800, above which there is little to stop it heading towards 1.280 and then even to 1.3000. On the downside, minor support only exists all the way down to Friday’s low of 1.2570. Buying dips remains the theme. Aside for the Court Appeal, watch out for the UK Services PMI today.

24 Hour: Prefer to buy dips

Medium term: Prefer to buy dips

Resistance Support
1.2850 Minor 1.2690 Minor
1.2800 Minor 1.2675 Minor
1.2785 100 DMA 1.2650 Minor
1.2770 5 Oct high 1.2600 Minor
1.2736 Friday high 1.2570 Friday Low

Economic data highlights will include:

M: UK Services PMI

T: UK Manufacturing/Industrial Production, NIESR GDP Estimate

W:

T:

F: Consumer Inflation Expectation, Goods Trade Balance

Meta Trader
GBPUSD: 4 Hour

gbp

gbp  …


USDCHF: 1.0102

US$Chf had a quick drop to 1.0070 following the Friday US jobs report but regained its ground, to finish the week back above 1.0100 leaving the outlook unchanged.

The momentum indicators are neutral, suggesting further choppy trade at close to current levels. If the dollar does head higher, then above Friday’s high could yet see a sterner test of 1.0200, beyond which could then head on to 1.0250 and to 1.0300/25 at some stage. On the downside buyers will be seen at Friday’s low, below which could see a move back to 1.0050 and possibly to 1.0000. Although the dailies currently suggest the chance of further dips, as we said before, with the weekly charts seemingly picking up steam we could be in for something much bigger going into 2017, with 1.0325 (Nov 2105 high) now coming into view, above which could see a run towards 1.0700 and feasibly to 1.1380 ((38.2% of 1.8309/0.7080). Buying dips remains preferred.

24 Hour: Neutral – Prefer to buy dips

Medium term: Neutral – Prefer to buy dips                                                           

Resistance Support
1.0307 2 Dec  2015 high 1.0180 Minor
1.0255 29 Jan high 1.0067 Session low
1.0223 2 Feb high 1.0048  (23.6% of 0.9548/1.0204)
1.0204 30 Nov high 1.0000 Psychological
1.0178 Session high 0.9950  (38.2% of 0.9548/1.0204)

Economic data highlights will include:

M:

T: CPI

W:

T:

F: Unemployment

Meta Trader
USDCHF: 4 Hour

chf


AUDUSD: 0.7458

The Aud had a choppy session on Friday, falling to 0.7400 following the NFP figure but then regaining its ground after the AHE put a soft tone into the US$, to finish the week at 0.7460. The coming week will see the RBA Interest Rate Decision for December (Tues) although no change is expected. Ahead of that, today we get the TD Inflation and the ANZ Job Ads as well as the Caixin China Services PMI, so it has the makings of an active session. Also of note was the weekend TV interview of the former head of the Liberal Party, who said that It’s only a matter of time before Australia loses its AAA credit rating as the nation’s budget falls further into deficit.

The momentum indicators again offer little hint in either direction and it looks like being a generally sideways session, albeit that the 1 & 4 hour charts hint at the chance of minor topside probes. If so, resistance will be seen at 0.7480 and again at 0.7500, a break of which there is then not too much to stop it heading on towards 0.7545/50 although I don’t really see it and prefer to sell into any strength towards 0.7500, with a SL place above 0.7550. On the downside, back below 0.7400 could then head back to the recent support at 0.7360/70, a break of which could then see a move towards 0.7335 and then to 0.7300/10 although this looks equally unlikely in the short term.

24 Hour: Neutral

24 Hour: Prefer to sell rallies.

Resistance Support
0.7542 50% pivot of 0.7777/0.7310 0.7430 200 HMA
0.7510 Minor 0.7400 Friday Low
0.7496 29 Nov high/30 Nov high 0.7363/61 24 Nov low/22 Nov low
0.7480 Minor 0.7335 Weekly cloud base
0.7468 Friday high 0.7310 21 Nov low

Economic data highlights will include:

M: TD Inflation, ANZ Job Ads, Caixin China Services PMI

T: Current Account, China Foreign Exchange Reserves, RBA Interest Rate Decision

W: AIG Performance of Construction Index, Q3 GDP

T: Australian Trade Balance, China Trade Balance

F: Home Loans, Investment Lending for Homes, China CPI, PPI

Meta Trader
AUDUSD: 4 Hour

aud


NZDUSD: 0.7140

After some choppy trade on the release of the US jobs data the Kiwi rallied strongly into the week’s close, taking out 0.7100 and then heading on towards 0.7150, finishing just below there. The 4 hour/daily momentum indicators are looking more positive now, and a run towards the decent resistance at 0.7185 seems to be on the cards, a break of which could see a move to 0.7200+, possibly up to 0.7240, although doubtful early in the week.

On the downside buyers will be seen at 0.7120 and at 0.7100, below which could see a return to Friday’s low of 0.7085 and eventually to 0.7035, where the 200 DMA previously propped it up. This looks unlikely to be seen for a while, but I retain a longer term bearish bias, and a break of the 200 DMA could see another run towards 0.7000 below which would open the way to 0.6970 and 0.6950.

24 Hour: Mildly bullish

Medium term: Prefer to sell rallies

Resistance Support
0.7200 Minor 0.7100 100 HMA
0.7185 (50% of 0.7400/0.6983)/100 DMA 0.7085 Friday Low
0.7170 Minor 0.7070 200 HMA
0.7159 30 Nov high 0.7043 2 Dec low
0.7147 Friday high 0.7035/32 200 DMA

Economic data highlights will include:

M: ANZ Commodity Price Index

T: Building Permits (Oct), Global Dairy Trade Index, Manufacturing Sales

W:

T:

F: Electronic Card Retail Sales

Meta Trader
NZDUSD: 4 Hour

nzd

The post 5 Dec: ECB, RBA Meetings due this week, while UK High Court Appeal over Brexit starts today #fx #forex appeared first on FX Charts Daily.